The Rice Tariffication Law and Our Struggling Farmers: Who is to Blame?

Months prior to the passing of the controversial Rice Tariffication Law on February 15, 2019, analysts warned of the drastic toll the law would take on farmers—one of the marginalized groups in an ironically agricultural country. Their warnings proved true as seven months on, farmers across the country are struggling to make ends meet with the farmgate price for palay hitting record lows.

The struggle of the Filipino farmer is one that has lasted for decades, if not centuries. Yet the consequences of the Rice Tariffication Law have exacerbated their situation to new extremes. Empathetic to their struggle, Filipinos have been quick to point fingers at the senators (or mainly, senator, singular) who authored the bill, but the Rice Tariffication Law is more complicated than the black and white picture social media portrays. Here’s why:

What is the Rice Tariffication Law?

Before we deconstruct the law, we need to understand it. Consider the Rice Tariffication Law (Republic Act 11203) the unli-rice import order.

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It allows for the removal of import quotas, taking off the cap on rice imports and allowing foreign rice to flood the local market—but only if importers can pay the price. Also dubbed the Rice Liberalization Law, it places a 35 percent tariff on imported rice coming from ASEAN countries and a 40 percent tariff on non-ASEAN countries.

President Rodrigo Duterte signed the bill into law in response to the insane price hikes of rice that took place in 2018 when rice hit as much as P70 per kilo. The law is intended to lower the price of rice by increasing supply, but no one accounted for it to plunge to as low as P7 per kilo.

What did the Philippines promise?

The bill was authored by Senator Cynthia Villar, who bears the brunt of the backlash from farmers and netizens alike. However, Villar says that the law was created to fulfill the country’s obligation to the World Trade Organization (WTO), of which the Philippines has been a member since 1995.

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By becoming a member of the WTO, the Philippines agreed to lift all trade barriers, like quotas, in place of tariffs—with rice as the only exception. The Philippines’ 1995 agreement with the WTO states that the Philippines would be allowed to control the importation of rice through quotas to protect Filipino farmers, on the condition that the Philippines would work on developing its farmers for global competitiveness for the duration of the agreement. The agreement expired in 2005, but was extended until 2012 and again until 2017.

“We (lawmakers) did not decide on the importation of rice. We signed an agreement in 1995 with WTO, they will allow us to control the importation of rice for 22 years to prepare our farmers to become competitive to the imported rice, and this expired in 2017,” Villar said.

After numerous extensions, the government finally decided to fulfill its obligation to the WTO by filing the Rice Tariffication Bill, thus lifting the import limits on rice.

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Some would argue that the Rice Tariffication Law was inevitable—that the Philippines had to eventually fulfill its part of the bargain. But critics argue that the Philippines could have simply filed for another extension or exemption.

“There was nothing to stop us from asking for another waiver or extension after July 2017,” argued Raul Montemayor, national manager of the Federation of Free Farmers. “Of course, this would have required us to give additional concessions to some WTO member-countries, some of which may have not been acceptable. But the government just decided not to negotiate anymore for another extension and just remove the QRs. So, it was not true that the WTO forced us to tariffy rice. It was our own decision.”

So who is to blame?

Villar, who won the most votes in the 2019 midterm elections, was arguably among one of the most popular senators at the start of her term. However, the Rice Tariffication Law has attracted a growing number of critics as many netizens have called her out for certain comments she made during a senate hearing, claiming that P21 per kilo of rice (which would earn a farmer roughly P5,500 per month) was “too much” to ask for.

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But who is really to blame? Is it the WTO? The Philippine lawmakers who signed the agreement in 1995? The senator who authored the law?

It’s easy to blame one person for the surmounting struggles that farmers have been facing for years, but in reality, it’s systematic negligence that is at fault. The agreement was signed 24 years ago, which is enough time to fulfill the Philippines’ promise to improve the local rice industry. Yet, over the course of 24 years, five administrations, and 14 agriculture secretaries, the rice industry was still not prepared when the expiration date hit. As a result, a law was hastily signed to make up for 24 years of lost time. And now it’s the farmers that have to deal with the brunt of the consequences.

Lack of preparation is certainly to blame, caused by negligence that farmers are all too familiar with. But lack of foresight cannot be used as an excuse for the situation that farmers are now in. Lawmakers should have been aware of the impact this would have on the ground—analysts warned this would happen and the farmers who are now on the brink of selling their land are proving them right.

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What can be done?

As mandated by the Rice Tariffication Law, the P10 billion per year Rice Competitiveness Enhancement Fund (RCEF) is meant to use the taxes from the tariffs to fund mass irrigation, rice storage, and research initiative programs for the benefit of farmers. But the fund, which is the law’s main safety net for farmers, is already facing controversy as the senate is questioning where P4 billion allocated to help farmers went.

However, one analyst claims that the problem lies in the tariff level being at only 35 percent, suggesting that it can be increased if the volume of imports becomes too high.

On the consumer side, citizens can purchase rice directly from rice farmers in their local communities at reasonable prices (such as P20 per kilo), and urge their schools, companies, and communities to follow suit. You can also download the app Session Groceries, which will soon guide you to a Filipino rice farmer who you can purchase from directly.

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The irony can’t be lost in our situation—a primarily agricultural country that struggles in sustaining its farmers. Perhaps it would do well to remember this Polish proverb when it comes to the Rice Tariffication Law and all other measures that impact farmers: “If the farmer is poor, then so is the whole country.”